FED:Hockey call threatens prosperity: Swan

Federal Treasurer Wayne Swan has accused the opposition of threatening Australia's prosperity with a demand the government regulate bank interest rates.

Labor has made political capital out of opposition treasury spokesman Joe Hockey's call for the treasurer to intervene to prevent banks from raising borrowing levels before Reserve Bank moves on the cash rate.

In an unusual day in politics, the Australian Greens and the left-leaning political lobby group GetUp are backing the coalition's stance on regulating banks.

Labor has continued to advocate free-market economics in the finance sector, as a West Australian Liberal defended comments he made that appeared critical of Mr Hockey.

Fronting parliament's question time, Mr Swan said former Liberal prime minister John Howard and his long-serving treasurer Peter Costello would wince at Mr Hockey's suggestions.

"It's an attack on the very pillars of our prosperity and therefore an attack on prosperity itself," Mr Swan told parliament.

"Because they risk fracturing that economic consensus that has been so important to confidence domestically and confidence in the international economy."

Mr Swan said he would defend the independence of the Reserve Bank to set interest rates "no matter how uncomfortable that may be for any of us from time to time".